Online advertising is a billion dollar industry. Ever since the dawn of the Internet, companies, ranging from mom and pop stores to established brands, have increasingly allocated large portions of their marketing resources to advertising over the web. And as technology continues to improve and more individuals have access to Internet-enabled computing devices, the Internet is increasingly becoming the predominant advertising medium to consumers.
Nowadays, any company wishing to advertise on the web can do so in a number of ways. As one option, it can contract with a content publisher, such as a web site or a mobile app developer, and have its ads presented on the site's web pages or in the mobile app when it is loaded on user devices. As another option, it can contract with a search engine firm (such as GOOGLE) and have its ads posted on the firm's search engine results pages. As yet another option, it can contract with an online advertising network or exchange and have its ads posted on web pages of sites partnered with the network. When a user visits such a site, for example, the site would retrieve ads from its advertisers' ad inventories (stored either locally on the site's own server or remotely on the advertisers' servers), and present them on its web pages to the visitor.
In the aforementioned online advertising arrangements, it is not uncommon for the advertisers to gain access to valuable consumer-related data over time, whether through the use of tracking technologies (e.g., cookies or code embedded in its ads) that identify users and monitor their activities on partner web sites or in mobile apps, or by purchasing the data directly from third party sources. This treasure trove of information includes not only ad targeting data (such as users' ages, genders, locations, occupations, interests, hobbies, recently submitted search engine keywords or phrases, etc.), but also personally identifiable information (such as the users' names, e-mail addresses, and Internet protocol (“IP”) addresses). Armed with this resource, advertisers gain invaluable insight into the personal lives of consumers, which helps them tailor their marketing strategies differently for different people. That is, by leveraging this information, advertisers can present certain ads to certain consumers (e.g., NIKE sneaker ads to young male joggers or best-selling novels to avid fiction readers), and avoid delivering irrelevant ones (e.g., ads for ballet shoes or golf magazine subscriptions) that those consumers would likely not act on.
But while access to and use of such consumer-related data enables the advertising industry to run efficiently and profitably, it comes at the expense of user privacy. First, consumer activity tracking is invasive and thus can damage the public's trust in the Internet. Additionally, much of the accumulated personal information (such as names, addresses, etc.) are not required for ad targeting purposes; oftentimes, simply knowing that a certain user is female and enjoys knitting, for example, is sufficient to target highly relevant ads to her—there's no need for the user's name and residence. Furthermore, the information is often shared or sold in marketplaces that consumers have little or no control over and, if left unprotected, can fall into the hands of hackers or other untrustworthy actors, leading to possible misuse to the detriment of the general public.